Beijing Time
EST

News Center

Company News

Home>News Center>Company News

Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2017
Time:2017/5/19 16:45:36  Source:
Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2017 -Teleconference to be Held on Friday, May 19, 2017 at 9:00 am EDT– BEIJING, May 18, 2017 - Fuwei Films (Holdings) Co., Ltd. (Nasdaq: FFHL) (“Fuwei Films” or the “Company”), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the first quarter of 2017 ended March 31, 2017. Highlights Net sales during the first quarter ended March 31, 2017 were RMB67.9 million or US$9.9 million, compared to RMB62.1 million, during the same period in 2016, representing an increase of RMB5.8 million or 9.3%, mainly due to the increased sales price. Basic and diluted net loss per share was RMB3.72 or US$0.54 and RMB3.69 for the three-month period ended March 31, 2017 and 2016, respectively. Our gross profit was RMB3.8 million or US$0.5 million for the first quarter ended March 31, 2017, representing a gross margin of 5.5%, as compared to a gross margin of 9.0% for the same period in 2016. Correspondingly, gross margin rate decreased by 3.5 percentage points compared to the same period in 2016. Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, “While we continue to face strong competition from emerging and incumbent players in the marketplace, which has led to oversupply relative to demand in the marketplace, we are encouraged by positive trends in the sales of specialty films. We believe our commitment to innovation and R&D has expanded our end-user applications that will enable the Company to capitalize on these opportunities despite challenging industry and economic conditions.” First Quarter 2017Results Net sales during the first quarter ended March 31, 2017 were RMB67.9 million or US$9.9 million, compared to RMB62.1 million, during the same period in 2016, representing an increase of RMB5.8 million or 9.3%, mainly due to the increased sales price. In the first quarter of 2017, sales of specialty films were RMB21.8 million or US$3.2 million or 32.0% of our total revenues as compared to RMB21.8 million or 35.0% in the same period of 2016. The following is a breakdown of commodity and specialty film sales (amounts in thousands): Three-Month Period Ended March 31, 2017 % of Total Three-Month Period Ended March 31, 2016 % of Total RMB US$ RMB Stamping and transfer film 27,071 3,933 39.9% 23,783 38.2% Printing film 6,270 911 9.2% 2,410 3.9% Metallization film 2,618 380 3.9% 794 1.3% Specialty film 21,762 3,162 32.0% 21,759 35.0% Base film for other application 10,223 1,485 15.0% 13,401 21.6% 67,944 9,871 100.0% 62,147 100.0% Overseas sales were RMB13.2 million or US$1.9 million, or 19.4% of total revenues, compared with RMB12.5 million or 20.1% of total revenues in the first quarter of 2016, representing an increase of RMB0.7 million or 5.6%. While a decrease in sales volume caused a decrease of RMB0.2 million, this was offset by an increase of RMB0.9 million caused by the increase of sales price. The following is a breakdown of PRC domestic and overseas sales (amounts in thousands except percentages): Three-Month Period Ended March 31, 2017 % of Total Three-Month Period Ended March 31, 2016 % of Total RMB US$ RMB Sales in China 54,730 7,951 80.6% 49,632 79.9% Sales in other countries 13,214 1,920 19.4% 12,515 20.1% 67,944 9,871 100.0% 62,147 100.0% Our gross profit was RMB3.8 million or US$0.5 million for the first quarter ended March 31, 2017, representing a gross margin of 5.5%, as compared to a gross margin of 9.0% for the same period in 2016. Correspondingly, gross margin rate decreased by 3.5 percentage points compared to the same period in 2016. Our average cost of goods sold increased by 13.2% compared to the same period in 2016 due to the price increase of main raw materials. Consequently, the increase in the average cost of goods sold was significantly higher than that in average product sales prices during the first quarter ended March 31, 2017, which contributed to the decrease in our gross margin compared with the same period in 2016. Operating expenses for the first quarter ended March 31, 2017 were RMB13.8 million or US$2.0 million, which was RMB1.2 million, or 8.0% lower than the same period in 2016. This decrease was mainly due to the decreased allowance for doubtful accounts receivable. Net loss attributable to the Company during the first quarter ended March 31, 2017 was RMB12.2 million or US$1.8 million compared to net loss attributable to the Company of RMB12.1 million during the same period in 2016. Basic and diluted net loss per share was RMB3.72 or US$0.54 and RMB3.69 for the three-month period ended March 31, 2017 and 2016, respectively. Total shareholders’ equity was RMB253.3 million or US$36.8 million as of March 31, 2017, compared with RMB265.2 million as of December 31, 2016. As of March 31, 2017, the Company had 3,265,837 basic and diluted ordinary shares outstanding. Conference Call Information The Company will host a teleconference on Friday, May 19, 2017, at 9:00 a.m. EDT / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-877-407-9205 in North America, or +1-201-689-8054 internationally, approximately 10 minutes prior to the scheduled start time. A replay of the call can also be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following Conference ID: 10398. The replay will be available until June 19, 2017, at 11:59 p.m. EDT. About Fuwei Films Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. (“Fuwei Shandong”). Fuwei Shandong develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei's BOPET film is widely used to package food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries. Safe Harbor This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include; significant competition in the BOPET film industry, especially the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the adverse impact of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain main importing countries; fluctuations of RMB exchange rate, the reduce in demand for the Company's products or the loss of main customers which may result in the decrease of sales, and negatively influencing the Company's financial performance, uncertainty as to the future profitability, uncertainty as to the Company's ability to successfully operate its third BOPET production line, uncertainty as to the Company's ability to continuously develop new BOPET film products to be produced by the third production line and keep up with changes in BOPET film technology, risks associated with possible defects and errors in its products including complaints and claims from clients, uncertainty as to its ability to protect and enforce its intellectual property rights, uncertainty as to its ability to attract and retain qualified executives and personnel, and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in light of the volatility in the prices of petroleum products in recent years, instability of power and energy supply, and the uncertainty regarding the future operation of the Company in connection with the changes in the labor law in China, the measures taken by the Chinese government to save energy and reduce emissions, and the complaints from nearby residents and local government about the noise caused by our production as well as the uncertainty of the impact of major shareholder transfer that have substantial influence over the Company and the Company's business operation including possible overlap of our BOPET products, customers and market orientation with an BOPET film manufacturer, which is controlled by the same individual who has control over the shares of our major shareholder. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of the risk factors. For more information, please contact: In China: Ms. Xiaoli Yu Investor Relations Officer Phone: +86-133-615-59266 Email: fuweiIR@fuweifilms.com In the U.S.: Vivian Chen Investor Relations Grayling Phone: +1-646-284-9427 Email: vivian.chen@grayling.com Financial Tables to Follow FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2017 AND DECEMBER 31, 2016 (amounts in thousands except share and per share value) (Unaudited) March 31, 2017 December 31, 2016 RMB US$ RMB ASSETS Current assets Cash and cash equivalents 21,928 3,186 13,343 Restricted cash 45,501 6,610 73,421 Accounts and bills receivable, net 24,260 3,525 29,453 Inventories 24,926 3,621 25,153 Advance to suppliers 10,727 1,558 6,043 Prepayments and other receivables 3,080 447 6,489 Deferred tax assets - current 1,242 180 1,199 Total current assets 131,664 19,127 155,101 Plant, properties and equipment, net 399,687 58,067 410,654 Construction in progress 431 63 431 Lease prepayments, net 17,227 2,503 17,358 Advance to suppliers - long term, net 532 77 1,861 Deferred tax assets - non current 7,996 1,162 8,032 Total assets 557,537 80,999 593,437 LIABILITIES AND EQUITY Current liabilities Short-term borrowings 60,000 8,717 60,000 Long-term loan, current portion 3,300 479 3,300 Due to related parties 136,141 19,779 131,747 Accounts payables 18,471 2,683 20,581 Notes payable 75,500 10,969 100,888 Advance from customers 2,565 373 3,509 Accrued expenses and other payables 5,291 769 5,204 Total current liabilities 301,268 43,769 325,229 Deferred tax liabilities 2,939 427 2,997 Total liabilities 304,207 44,196 328,226 Equity Shareholders’ equity Registered capital(of US$0.519008 par value; 5,000,000 shares authorized; 3,265,837 issued and outstanding) 13,323 1,936 13,323 Additional paid-in capital 311,907 45,314 311,907 Statutory reserve 37,441 5,439 37,441 Accumulated deficit (110,662) (16,077) (98,505) Cumulative translation adjustment 1,321 191 1,045 Total shareholders’ equity 253,330 36,803 265,211 Total equity 253,330 36,803 265,211 Total liabilities and equity 557,537 80,999 593,437 FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2017 AND 2016 (amounts in thousands except share and per share value) (Unaudited) The Three-Month Period Ended March 31, 2017 2016 RMB US$ RMB Net sales 67,944 9,871 62,147 Cost of sales 64,187 9,325 56,558 Gross Profit 3,757 546 5,589 Operating expenses Selling expenses 3,506 509 2,949 Administrative expenses 10,266 1,491 12,048 Total operating expenses 13,772 2,000 14,997 Operating loss (10,015) (1,454) (9,408) Other income (expense) - Interest income 286 42 218 - Interest expense (2,446) (355) (1,754) - Others (expense) income, net (47) (7) (1,529) Total other expense (2,207) (320) (3,065) Loss before provision for income taxes (12,222) (1,774) (12,473) Income tax benefit expense 65 9 418 Net loss (12,157) (1,765) (12,055) Net loss attributable to non-controlling interests - - - Net loss attributable to the Company (12,157) (1,765) (12,055) Other comprehensive income - Foreign currency translation adjustments attributable to non-controlling interest - - 4 - Foreign currency translation adjustments attributable to the Company 276 40 (5) Comprehensivelossattributable to non-controlling interest - - 4 Comprehensive lossattributable to the Company (11,881) (1,725) (12,060) Loss per share, Basic and diluted (3.72) (0.54) (3.69) Weighted average number ordinary shares, Basic and diluted 3,265,837 3,265,837 3,265,837 FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2017AND 2016 (amounts in thousands except share and per share value) (Unaudited) The Three-Month Period Ended March 31, 2017 2016 RMB US$ RMB Cash flow from operating activities Net loss (12,157) (1,766) (12,055) Adjustments to reconcile net loss to net cash used in operating activities - Depreciation of property, plant and equipment 10,981 1,595 10,668 - Amortization of intangible assets 131 19 131 - Deferred income taxes (65) (9) (418) - Bad debt expense 287 42 1,723 -Inventory provision - - (226) Changes in operating assets and liabilities - Accounts and bills receivable 4,906 713 (13,623) - Inventories 227 33 5,411 - Advance to suppliers (4,683) (680) 42 - Prepaid expenses and other current assets 47 7 (373) - Accounts payable (2,110) (308) (2,399) - Accrued expenses and other payables 97 14 (1,087) - Advance from customers (945) (137) (349) - Tax payable 3,361 488 10,012 Net cash used in operating activities 77 11 (2,543) Cash flow from investing activities Purchases of property, plant and equipment (14) (2) 498 Restricted cash related to trade finance 27,921 4,056 (3,414) Advanced to suppliers - non current 1,329 193 196 Amount change in construction in progress - - (2,195) Net cash (used in) provided byinvesting activities 29,236 4,247 (4,915) Cash flow from financing activities Proceeds from related party 4,393 638 1,583 Payment of capital lease obligation - - (302) Change in notes payable (25,388) (3,688) 1,270 Net cash provided by (used in)financing activities (20,995) (3,050) 2,551 Effect of foreign exchange rate changes 267 56 (19) Net decrease in cash and cash equivalent 8,585 1,264 (4,926) Cash and cash equivalent At beginning of period/year 13,343 1,922 14,355 At end of period/year 21,928 3,186 9,429 SUPPLEMENTARY DISCLOSURE: Interest paid 2,446 355 1,754 Income tax paid - - - SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: Account payable for plant and equipment: 1,231 179 2,121